Globalization and National Economies

CSS 2024 Solved Essay | Globalization and National Economies

Maleeha Sattar, a Sir Syed Kazim Ali student, has attempted the CSS 2024 essay “Globalization and National Economies” on the given pattern, which Sir Syed Kazim Ali teaches his students. Sir Syed Kazim Ali has been Pakistan’s top English writing and CSS, PMS essay and precis coach with the highest success rate of his students. The essay is uploaded to help other competitive aspirants learn and practice essay writing techniques and patterns to qualify for the essay paper.

Outline

1-Introduction

• ✓Thesis Statement

Despite concerns over power imbalances and cultural erosion at the hands of developed nations in the globalized world, the significant economic growth, technological advancements, and capacity-building facilitated by globalization have overwhelmingly benefited developing countries’ national economies, outweighing any negative consequences.

2-Deciphering the term ‘Globalization’ and its features

• ✓Understanding the meaning of Globalization from an economic perspective and the chain of economic trends in a globalizing world
• ✓What are the main features of globalization, especially in the economic domain?
  • Interdependence, Integration, Time-compression, and Diffusion

3-Understanding the term ‘National Economies’ and the goals and characteristics attached to it

• ✓Defining national economies
• ✓Universal goals and characteristics possessed by all national economies
  • Efficiency, equity, economic freedom and growth, and employment and price stability

4-Ripple effect of globalization trends on national economies: A current scenario

• ✓Reformation of local industries to survive geopolitical tensions
  • Case in Point: Russia reforming its energy policies after the Russian-Ukraine war
• ✓Focus on diversification of customers to avoid decoupling aftershocks
  • Case in Point: US’s ‘China plus 1’ strategy, China’s face towards other emerging markets and its role in BRICS, and their close allies’ ever-increasing shares with the rival blocs, prominent examples

5-How has globalization promoted the developing countries’ national economies?

• ✓Boosting free trade agreements, enhancing global interdependence
  • Case in Point: The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a clear manifestation of the case
• ✓Formulating lucrative economic policies attracting Foreign Direct Investment (FDI) opportunities
  • Case in Point: Countries with low tax jurisdictions, Singapore and the Netherlands, have ranked at 98.38 and 95.98 per cent in the Investor Friendliness Index (2022), further increasing the FDI opportunities for them
• ✓Introducing faster goods and services transportation services
  • Case in Point: Containerization has revolutionized the flow of goods just as the computer revolutionized the flow of information. (The New York Times)
• ✓Expanding local businesses internationally with the help of trading partners
  • Case in Point: Mexico’s automotive industry under the United States-Mexico-Canada Agreement (UMSCA)
• ✓Boosting tourism industries: heavy investment in the country’s GDP and cultural exchange
  • Case in Point: Indonesia managed USD 10.46 billion in foreign exchange earnings from tourism during the quarter of the year 2023, witnessing a strong rebound in its sector despite the challenges posed by the pandemic. (Indonesia Investments)
• ✓Providing full-scale employment and entrepreneurship opportunities to people
  • Case in Point: India’s initiatives like Make in India and Startup India have encouraged local entrepreneurs to transform India into a global manufacturing hub and create jobs for locals, too
• ✓Increasing knowledge transfer and capacity-building of institutions
  • Case in Point: Vietnam and Colombia have learned from the Dutch model and implemented Integrated Pest Management (IPM) strategies to minimize their chemical inputs and protect crops
• ✓Plummeting country’s economic growth by leveraging e-commerce and digital trade
  • Case in Point: China’s e-commerce platforms, such as Alibaba and JD. Com, make trading more accessible and faster

6-On what grounds do opponents argue that globalization is controlled by developed countries rather than promoting their economies?

• ✓Counter Argument: Developed countries dictating terms in global trade and investment, perpetuating asymmetrical power relations in the globalized cum controlled world
  • Refutation: While power imbalances exist, globalization also enables developing countries to negotiate and participate in international forums.
    • Evidence: The World Trade Organization (WTO) allows all member states to voice their concerns and seek fair trade practices.
• ✓Counter Argument: Globalization has commodified indigenous people’s traditions, languages, and customs.
  • Refutation: Cultural exchange programs are the antidote to the Western consumer culture in technology, fashion, food, etc., like Apple, Zara, McDonaldization, etc.
    • Evidence: UNESCO’s Intangible Cultural Heritage advocates for the safety of traditional cultural practices worldwide.

7-How can globalization further integrate the growth of national economies in the upcoming years?

• ✓To implement the multidimensional framework to access national economic performance and growth quality
• ✓To shift towards more sustainable growth models
• ✓To invest in physical and digital infrastructure to boost productivity and connectivity

8-Critical Analysis

9-Conclusion

The world has become more interconnected today than ever since the Industrial Revolution, with information transferring across continents in seconds and goods crossing oceans effortlessly. Indeed, it is the essence of globalization, resulting from nations’, businesses’, and people’s interactions on the global stage. Economically, it is a grand marketplace where different national economies participate and flow their goods, services, and capital freely. And while globalization has uplifted developing countries by fostering economic growth, technological advancements, and capacity-building, it’s not always a harmonious dance. Despite concerns over power imbalances and cultural erosion at the hands of developed nations in the globalized world, the significant economic growth, technological advancements, and capacity-building facilitated by globalization have overwhelmingly benefited developing countries’ national economies, outweighing any negative consequences. For example, amid geopolitical tensions, developing states have opted for plausible alternatives, like reforming local industries and diversifying customers, to continue the development process. Besides this, free trade agreements, containerization, tourism industries, and the introduction of innovative technologies have already made developing economies more integrated and diffuse. This essay throws light on the maxim of how globalization has promoted developing countries’ national economies.

Delving into the understanding of the term globalization from the economic perspective before understanding the national economies concept, it is the increased interconnectedness of all countries and people, making the globe a large village where borders are open for the speedy flow of goods, services, information, finance, ideas, and much more. Due to this phenomenon, the national and international bodies regulate their policies and relations depending on the prevailing globalization wave, working as a cradle for new economic trends to breathe. According to the changing time-frames, this oscillating phenomenon has slowly integrated the world, but with the experience of different economic practices from the old-archaic economic mercantilism to the current economic liberalism. Further, the definition of the broad concept varies from domain to domain, but its progressive process revolves around similar features. The people enjoy interdependence, integration, time compression, and diffusion with less government intervention but under their watchdog eye. As these new ventures unfold for people every coming day, people assume assimilation of their traditions and cultures too, thus making people-to-people contact for building trust and starting new businesses not an arduous task for everyone. 

Debunking the national economies concept, it encapsulates nations’ entire intrinsic and extrinsic economic activities, including consumption of goods and services, production, distribution, trade, etc., at the hands of various economic agents involved. The regulation of their state of affairs and maintenance of their image to strengthen their sovereignty roots is indeed their prime priority while accomplishing these crucial tasks. Besides this, they also do so to achieve specific goals and attain characteristics necessary for their well-being and prosperity. Such as efficiency in their economic activities, equity for all in the country, economic freedom to choose and exercise economic activities, economic growth boosting- a necessity to stand out from others, employment opportunities for all ages, and price stability to attract foreign investors, tech-giants, and diaspora for better living standards in the contemporary global home, are some in this regard. To achieve these markers, all nations explore themselves and utilize their maximum specialized items and potential, whether their natural resources, peoples’ intellect, places of attraction, etc., hence extinguishing them in the markets by giving them a competitive edge over all. 

Moving towards the ripple effect of globalization’s wave on national economies’ trends in the current scenario, the economies have started adopting different strategies, especially after COVID-19, to avoid further disruptions and de-globalization debates. As the integrated world grows faster, not a single economy can afford the anathemas of turfs and nationalism. So, after opting for near or dual-sourcing rather than regionalization, they have focused on reforming their local industries to survive further geopolitical tensions. To illustrate, Russia’s energy policies and the Russian-Ukraine war are prominent in this case. Moreover, economies have also found other ways, like diversification of their customers, to avoid the decoupling aftershocks of the new US-China cold war. Viewing triangular efforts in this regard, the US’s ‘China plus 1’ strategy of its ‘De-risking Policy’s part, China’s face towards other emerging markets and its role in the BRICS, and their close allies’ ever-increasing shares with the rival blocs are collectively sketching the perfect picture of today’s intermingled not bifurcated national economies in the contemporary era. 

Taking an overview of how globalization has promoted national economies, it has boosted the ratio of free-trade agreements among the economies, increasing global interdependence. Due to this, the nations are getting closer, offering each other multiple trade opportunities, and representing their specialized commodities to each other to excel and grow with comparative advantages. For instance, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a case in point. In this partnership, 98 per cent of trade barriers have been removed for all member states; protection of intellectual property, investment diversity, and inclusivity in all approaches are some primary goals. Therefore, developing economies prefer to bind to these trade agreements for stability and growth in the globalized environment.

Further, national economies under the influence of globalization have assumed Foreign Direct Investment (FDI) as the best medium for their economic well-being. So, they have started formulating lucrative economic policies that help them attract FDI in their country. To examine this argument’s validity, countries with low tax jurisdictions, Singapore and the Netherlands, have ranked at 98.38 and 95.98 per cent in the Investor Friendliness Index (2022), further increasing their FDI opportunities. Indeed, they have reformed their taxation rules and regulations to bring investors’ attention towards their countries. Verily, developmental plans and social-net projects can also completed via their assistance. Hence, economies have started thinking outside the box regarding mechanisms to attract FDI towards them in the age of globalization. 

 Next, developing economies have also diligently started introducing different transportation services that are affordable for them and, above all, less time-consuming. Thanks to globalization, this miracle has become possible. In this way, national economies have access to their goods in time. One such example is containerization, which has made peoples’ lives more accessible and helps boost economies’ efficiency. According to the New York Times, “Containerization has revolutionized the flow of goods just as the computer revolutionized the flow of information.” Indeed, medical aid, even during the COVID-19 lockdowns, has been sent to every part of the globe due to this facility, thus proving its importance in a world characterized by globalization. 

Moreover, the expansion of local businesses internationally with the help of trading partners is also a venture launched due to globalization. According to this idea, the country’s businessmen or local industry can sign a business deal with other countries’ trading companies or men. For example, Mexico’s automotive manufacturing industries or independent automotive mechanics under the United States-Mexico-Canada Agreement (UMSCA) supply their automotive machines’ parts, such as engines, electric systems, transmissions, etc.., to the US companies’ buyers. Through this chain-work, the triad frame has helped local businesses grow and get recognized internationally so that other economies also start investing in them, proving globalization a factor behind national economies’ promotion. 

Additionally, after viewing globalization as a game changer, developing nations have started boosting their tourism industries. Through this move, they have benefitted their economies dually through heavy investment in their GDP and massive cultural exchange. As per Indonesia Investments, “Indonesia has managed USD 10.46 billion in foreign exchange earnings from tourism during the quarter of 2023, witnessing a strong rebound in its sector despite the challenges posed by the pandemic.” Indeed, this massive contribution to the country’s GDP has a ripple effect on its developmental initiatives and further planning. Besides, people-to-people contact has also imparted minimal impact in a way that it has imparted the country’s goodwill gesture on foreigners’ hearts and minds, furthering the industry’s growth and Economic growth, benefiting them from globalization.

Likewise, due to globalization, national economies have provided their people with full-scale employment and entrepreneurship opportunities. For instance, India’s initiatives, like Make in India and Startup India, have encouraged local entrepreneurs to reform India into a global manufacturing hub and create jobs for locals. By doing so, the multidimensional growth of economies in IT, education, economics, health, and many more sectors can make it possible to touch the acme of its glory. Thus, the vibrant initiatives have the potential to integrate and diffuse the world and simultaneously change their fate in the global landscape. 

More importantly, developing economies in the globalized world also adopt other developed nations’ successful developmental ideas, increasing knowledge transfer and capacity-building of their institutions. In fact, Vietnam and Colombia have learned from the Dutch agro-tech model and implemented Integrated Pest Management (IPM) strategies, including monitoring and assessing crops and cultural, biological, chemical, and regulatory control to minimize their chemical inputs and protect crops. Undoubtedly, this mechanism has proved very fruitful for their subsequent agriculture batches. And economies certainly learn about these holistic ideas and approaches due to the inclusion principle of globalization, thus demonstrating the validity of the aphorism. 

Last but not least, national economies can achieve their economic growth goalby leveraging e-commerce and digital trade using globalization tools. To exemplify this case, China’s e-commerce platforms, such as Alibaba and JD.Com, make trading more accessible and faster in today’s globalized world. Using internet penetration, China has enabled its SMEs to access the global markets through these e-platforms and sell their valuable products to consumers directly without the intervention of brokers, bypassing the traditional trading mechanism completely. Therefore, using digitalization in economic growth is a unique revolution that has been brought into effect due to globalization worldwide. 

Going down the ladder, as every coin has two sides, the contenders of the maxim also provide different thoughtful insights refuting the maxim’s validity. First, these critics argue that developed countries dictate terms in global trade and investment, perpetuating asymmetrical power relations in the globalized cum controlled world. However, their criticism was invalid when, after analysis, it was brought forth that while power imbalances exist, globalization also enables developing countries to negotiate and participate in international forums. Evidently, the World Trade Organization (WTO) allows all member states to voice their concerns and seek fair trade practices. So, this collaborative practice integrates everyone economically on the global stage, disapproving of the critics’ viewpoint. 

Similarly, another point that critics raise is globalization has commodified indigenous people’s traditions, languages, and customs. No doubt, globalization has made the world a single village, but it has also made its efforts to make people accept this diversity and preserve their roots. All the cultural exchange programs are antidotes to Western consumer culture regarding technology, fashion, food, etc., such as Apple, Zara, McDonaldization, etc. And the UNESCO’s Intangible Cultural Heritage advocates for the safety of traditional cultural practices worldwide. Therefore, opponents’ points of contention have been overruled after these strong rebuttals, gaining the upper hand for the main question.

Stepping forward towards the suggestions for national economies that they should adopt in the future, keeping in view globalization’s amalgamation phenomenon, they should implement the multidimensional framework to assess national economic performance and growth quality. For this purpose, they should have to access their economic growth progress not just restricted to the GDP analysis but also balancing efficiency with resilience, equity, long-term sustainability, and innovation- discovering new ways and mechanisms to deal with the problem for the future. All these dimensions will bring them inclusiveness and align them with their national and global priorities, helping them tackle all economic crises in their economies. 

Second, national economies should shift towards a more sustainable growth model initiation and ensure their implementation in them. Indeed, these subsidiary starters would collectively complete all Sustainable Development Goals (SDGs) goals, primarily related to equity, economic growth, poverty, hunger, health, energy, partnerships, peace, production and consumption, etc. Some of them adopted by a few countries include Renewable Energy Revolution, Global Resource Management, Green Economy Skills, etc. By doing so, the national economies can thus remove all socio-cultural hurdles hindering their economic growth and performance. 

Finally, investing in physical and digital infrastructure to boost productivity and connectivity would make national economies more potent in the globalized world. Indeed, this is the era of competition and survival of the fittest, so every economy must have to invest in its infrastructure on dual lines to remain at the top. All those nations that would do so reap the benefits of trade and exports in the international world other than those who stay indulged in internal strife and proxies. So, all developing economies must take lessons from the war-torn nation’s condition and follow in the footsteps of emerging and developed economies. 

In a robust diagnosis, globalization has played a pioneering role for national economies, opening up opportunities for them in the contemporary era. Undoubtedly, it has provided a single show-stop platform for all economies to play their economic cards: trade, investment, ideas flow and exchange, distribution, agreements, e-buying and selling, exports, etc. Truly, these benefits have enhanced the economies’ growth and efficiency threshold, enabling them to thrive in the interconnected world. While creating a world full of options for national economies, critical thinkers consider globalization a trap thrown by developed ones over the developing, widening gaps and inequalities. Thus, inclusive policy-making and vibrant initiatives can further promote the globalization phenomenon, which is necessary for national economies to grow and excel at the top using the maximum potential. 

To conclude, globalization’s transformative force has become an undeniable reality in the twenty-first century. National economies dancing to globalization tunes change their trends and policy dealings accordingly. And those economies that align themselves accordingly have continuously seen a boom in their economic cycles, as it has contributed to creating ease for their trade terms and conditions, making them more independent in the international market, and introducing some new productive forums for them to showcase their knowledge and items. So, if contenders blame it as a feint, these pieces of evidence and arguments surely dispel their validity. Hence, more productivity inclusion would bring more integration and ease to all economies in the modern era. 

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